Can you consolidate payday loans? Statistics from UK finance company NowLoan indicate that most families that are forced to take out payday loans have more than one loan. In the long run, that can prove to be expensive. On top of that, it is easy to lose track of what you owe various loan companies. Unless they send you statements on a regular basis, it is easy to lose sight of what you owe and how much money you are obliged to pay out every month.

The other downside is that many people who take out payday loans are often vulnerable. Despite having taking out a loan, they may have to rely on food banks and vouchers to make sure their children get a hot meal every day. It is estimated that there are now at least 2,000 food banks in the UK.

Another problem is the debt trap. Payday loan users often find themselves trapped. The idea is to pay off the loan when you next get paid, but on many occasions, this does not happen. Instead, the risk is that payday loan customers end up taking out another loan.

How To Get Away From Using Payday Loans

It is widely recognised getting out of the payday loan trap is not easy. This is particularly true of borrowers who have taken out payday loans to clear credit card debt. Interest rates on credit cards are always high. At first, a payday loan may seem like an attractive option. The truth is that you may end up paying more.

One way to get out of debt is to arrange a guarantor loan.

How Do Guarantor Loans Work?

A guarantor loan works by someone else signing on the dotted acknowledging they will continue to pay the loan, or pay the outstanding balance on the loan off if you can't afford to do so. Your guarantor can be a parent, friend, or just someone who is willing to guarantee the loan.

Your guarantor must have a good credit history and be able to prove that he or she can afford to pay off the loan. The individual will be credit checked to make sure all information provided by him or her is correct.

Are Guarantor Loans Legal?

Yes, a guarantor loan is a legal financial instrument. They used to be very common and have become popular again since the financial crisis in 2008.

You don't need to go to a bank to set up a guarantor loan. As a matter of fact, many banks' lending rates relating to guarantor loans are expensive. It is a better idea to turn to alternative and more flexible lenders such as NowLoan.

What Are The Benefits Of Guarantor Loans?

A range of benefits applies to guarantor loans. First of all, you are likely to benefit from a lower interest rate. That means you are going to end up paying less for the loan in the long run. A longer payment period will also make it easier for you to pay the money back. Needless to say, you should never enter into a guarantor backed loan if you have no intention of paying it back in full.

For more financial advice on other types of loans, feel free to give NowLoan a call. Their team of friendly financial advisers is always happy to help you with sensible and genuine advice.

Author's Bio: 

John Smith is a Digital Marketing Consultant with more than 8 years of experience in SEO, SEM, SMO, blogging, etc having wide knowledge base into content marketing.